Caliphate ("succession" in Arabic) is an institution first created in the 7th century after the death of the prophet Muhammad. Now revived by the jihadists of the Islamic State in Iraq and the Levant (Isis), this old-new political-religious entity has been given its own hashtag, #CaliphateRestored – a potent weapon in a digital propaganda war.

Isis has shown itself to be a slick media operator in addition to its battlefield successes in Syria and Iraq. Other memorable hashtags –#SykesPicotOver and #BringbackmyHumvees – have encapsulated its achievements in erasing "artificial" colonial borders and humiliating both the US and Nouri al-Maliki, Iraq's Shia prime minister. Shocking YouTube videos and other images have advertised its intolerance and cruelty.

Sunday's rebranding exercise – presumably timed for maximum impact at the start of the holy month of Ramadan – certainly sounded authoritative: "We clarify to the Muslims that with this declaration of khilafah (caliphate), it is incumbent upon all Muslims to pledge allegiance to the Khalifah Ibrahim and support him (may Allah preserve him)," Isis commanded sternly.

Previous caliphates ruled over large parts of the Muslim world until the last one, the Ottoman caliphate, was abolished in 1924. In modern times Hizb ut-Tahrir has campaigned unsuccessfully for its restoration. So has al-Qaida. The campaign conjures up an idealised past rather than a feasible project in a world of nation states with more power than the Muslim ummah (community).

Still, it remains a deeply resonant idea. The self-proclaimed Caliph Ibrahim uses the name Abu Bakr al-Baghdadi – an easily recognisable reference to the first caliph in 632. Isis says Baghdadi has scholarly credentials: Sunday's announcement mentioned a lineage that purportedly stretches back to the Meccan tribe of Quraysh, to which the prophet Muhammad belonged.

However, the caliphate declaration will be seen in political rather than theological terms. "Cheap farce," was the trenchant conclusion of Abdelkhaleq Abdullah, an Emirati commentator. The views of more mainstream Sunni clerics in Iraq and beyond will be carefully watched. In the current sectarian climate, Isis clearly enjoys wider sympathy.

Reports from Syria's Raqqa province described Isis fighters celebrating the move, brandishing guns and their trademark black flags. Libyan jihadis were reported to be saluting Baghdadi as "our sheikh", and there were claims of allegiance from Ansar Bayt al-Maqdis, an Egyptian group based in Sinai.

"I think there is the capacity for expanded support," said Aymenn al-Tamimi, an expert on Isis. "There was already a pro-Isis trend in Gaza and Sinai and from Ansar al-Sharia in Libya and Tunisia. This declaration will reinforce that trend. This is unprecedented – even if it was predictable."

Proclaiming the caliphate puts Isis on a collision course with al-Qaida central, headed by Osama bin Laden's Egyptian successor Ayman al-Zawahiri, whose rift with Baghdadi has been in the open for months. Still, claims of legitimacy will be of little use unless they are matched by the ability to rule and hold territory in Iraq and Syria, let alone further afield.

"If Isis is driven back, Baghdadi risks being seen as the man who grasped for the caliphate, held it in his hands for one brief shining moment, then lost it all," wrote JM Berger on Intelwire.

On a lighter note, others wondered whether the new Islamic state will provide accreditation for journalists or appoint a minister of tourism. "The #IslamicState's caliphate in Iraq has as much chance of survival as an ice-cream cone in the desert," tweeted Philip Crowley, former spokesman for the US state department. "And few see it as a tasty flavor."

Isis's move will strengthen the opposition of the Sunni Arab monarchies that use their religious credentials to bolster their legitimacy. Saudi Arabia and Jordan are already jittery at the prospect of a burgeoning jihadi movement – though many blame the Saudis and other Gulf states for encouraging extremism by arming the Syrian rebels, even if they have now taken fright. The king of Morocco calls himself "commander of the faithful", the title claimed by Baghdadi.

"The ideological foundation of Isis is the view that the Muslim world is in decline because there's no caliphate and has been corrupted by foreign ideas," said Tamimi. "That's nonsense historically but the idealisation persists, and it's not exclusive to jihadists. The idea of the caliphate can certainly have an appeal and it won't lose steam in the short term. But in the long run – maybe in a few years – the project is in doubt."